House Punting: The Cost of Waiting to Buy in Hot Markets

from Bloomberg.com By Suzanne Woolley Aug 6, 2014 1:36 PM MT

When shopping for a big purchase, the line that “it never hurts to wait” often makes sense. But that’s only because by looking around more, you might find a better deal.

Which is why, with interest rates expected to rise over the next few years and home-buying demand still healthy, following that advice could be costly in today’s real estate market.


To put a price tag on the possible cost of waiting to buy a home, real estate information website Zillow Inc. assumed that the rate on a 30-year fixed-rate mortgage would rise 1 percentage point. It calculated how that higher rate -- which would be about 5.1 percent -- would affect a buyer's monthly mortgage payments. Zillow applied that rate to the median home price in 35 metropolitan areas, assuming a 20 percent down payment and a 30-year fixed-rate mortgage. 

(More assumptions that went into the calculations are here.)

The one-year waiting costs ranged from a minor $65 a month in St. Louis to a major $710 a month in San Jose, California.



Zillow’s calculations of the potential costs of waiting a year to buy a home:



Phoenix: $147 a month
San Jose, Calif.: $710 a month
San Francisco: $556 a month
Los Angeles: $478 a month
San Diego: $353 a month
Riverside, Calif.: $315 a month
Seattle: $299 a month
Sacramento, Calif.: $252 a month
New York: $201 a month
Boston: $198 a month

Portland, Ore.: $189 a month
Washington, D.C.: $186 a month
Las Vegas: $176 a month

Denver: $135 a month

Miami-Ft. Lauderdale: $129 a month
Orlando, Fla.: $128 a month
Atlanta: $118 a month

Tampa: $110 a month
Baltimore: $108 a month

Austin: $104 a month

Contact The Ehlen Team today to start the search for your new home!